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SOURCE Jackson Hewitt Tax Service Inc.
Graduating from college leads to important life changes that can trigger significant tax benefits
PARSIPPANY, N.J., March 19, 2013 /PRNewswire/ -- The United States National Center for Education Statistics estimated that 3.4 million college degrees were awarded in the 2011-12 school year. Many of these recent college graduates took on new and exciting responsibilities in the real world, like starting their first job this past tax year. With less than one month remaining to file a 2012 tax return and to help recent college graduates get started on the right foot, Jackson Hewitt Tax Service® is offering college graduates important tax-filing tips.
"Too many college graduates aren't aware of the tax benefits that are available to them once they enter the real world," said Mark Steber, chief tax officer, Jackson Hewitt Tax Service Inc. "Before graduation, it's generally been the parent or guardian enjoying the education tax breaks by claiming the student as a dependent on their tax returns. College graduates miss far too many deductions and credits, especially when they try to file for the first-time without the aid of a knowledgeable tax professional."
The tax preparers at Jackson Hewitt® can guide new and recent college graduates through the tax benefits available them, including:
- Deducting student loan interest – Taxpayers can claim up to $2,500 in student loan interest paid during the year as long as they are legally obligated to repay the loan, were at least a half-time student in a degree or certificate program when the loan was awarded and attended an eligible institution.
- How being claimed as a dependent by someone else can impact their taxes – Many college students are claimed as a dependent on their parent's or guardian's tax returns. This affects eligibility for certain deductions and credits, like student loan interest paid. Taxpayers should verify their dependent status before filing their taxes.
- How scholarships, fellowships and apprenticeships can impact their taxes – Scholarships and fellowships are taxable if they are not paid directly to the institution or were awarded to a non-degree candidate. Any part of the scholarship that is used for room, board or travel is also taxable. Generally, any payments from apprenticeships are taxed the same way as wages.
- Choosing withholdings – It is easy to owe taxes when taxpayers start their first 'real job' because they are accustomed to having a small amount of withholding. Any time income increases, it is important to make sure to have enough withholding to cover the new tax liability. The IRS Withholding Calculator helps taxpayers determine the best way to determine withholdings.
- Claiming moving expenses from relocating for a new job – Taxpayers must work full-time for 39 out of the next 52 weeks to be eligible. Keep track of mileage, lodging expenses and tolls when relocating, as well as the cost of moving any household goods and pets. All these relocation expenses can be tax deductible.
About Jackson Hewitt Tax Service Inc.
Jackson Hewitt Tax Service Inc. is an industry-leading provider of full service individual federal and state income tax preparation, with 6,800 franchised and company-owned locations throughout the United States, including 2,800 located in Walmart stores nationwide, and more than 400 Sears stores in the United States and Puerto Rico for the 2013 tax season. Jackson Hewitt Tax Service® also offers an online tax preparation product at www.JacksonHewittOnline.com. For more information, or to locate your neighborhood Jackson Hewitt® office, visit www.JacksonHewitt.com or call 1-800-234-1040. Jackson Hewitt can also be found on Facebook and Twitter, or check out Jackson Hewitt's "On the Street" video series, hosted by Chief Tax Officer Mark Steber and available on YouTube at http://www.youtube.com/jacksonhewitt.
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